Public sector expected to contribute about 60% of total construction demand in 2022: BCA
SINGAPORE: Construction demand in Singapore this year is
projected to be between S$27 billion and S$32 billion, with the public sector
expected to contribute about 60 percent
of the total demand, said the Building
and Construction Authority (BCA) on Wednesday (Jan 26).
Construction demand in the public sector is projected to be
between S$16 billion and S$19 billion, it said.
"This is supported by the strong pipeline of housing
projects including those under the Home Improvement Programme, as well as
healthcare developments and infrastructure works such as the Cross Island MRT
Line (Phase 1)."
Meanwhile, the private sector construction demand is
expected to reach between S$11 billion and S$13 billion this year, comparable
with the volume in 2021.
"Given the latest property cooling measures, residential building demand is anticipated to moderate year-on-year amid more cautious market sentiments," said BCA.
However, commercial building demand is expected to increase,
as hotels and attractions undergo refurbishment to prepare for inbound tourism
travel. Older commercial premises are also earmarked for redevelopment to
enhance their asset values.
In addition, the industrial building demand in the private
sector is expected to see some support from the construction of energy storage
facilities and biopharmaceutical manufacturing plants.
PRELIMINARY TOTAL CONSTRUCTION DEMAND IN 2021 ROSE 42 PERCENT
The preliminary total construction demand for 2021 increased
by 42 percent to about S$30 billion compared to 2020.
This was largely driven by public housing and infrastructure
projects, as well as an improvement in investment sentiments, said BCA.
The increase was about 7 percent higher than the upper bound
of BCA's earlier forecast of S$23 billion to S$28 billion, mainly due to an
increase in tender prices resulting from manpower and materials cost inflation.
The public sector construction demand rose from S$12.2
billion in 2020 to S$18.2 billion in 2021, underpinned by major projects such
as the Cross Island Line, the Jurong Region Line, the Tuas Water Reclamation
Plant, and new Build-To-Order units.
Construction demand in the private sector also rose from
S$8.9 billion in 2020 to S$11.8 billion in 2021, supported by higher demand for
residential, commercial, and industrial building developments as the economy recovers.
FORECAST FOR 2023 TO 2026
Over the medium term, BCA said it expects the total
construction demand to reach between S$25 billion and S$32 billion per year
from 2023 to 2026.
The projection excludes the Changi Airport Terminal 5
development and its associated infrastructure projects, as well as the
expansion of the two Integrated Resorts. This is due to the uncertainty of the
COVID-19 pandemic that could affect the construction schedules.
The public sector is expected to lead the demand,
contributing S$14 billion to S$18 billion per year from 2023 to 2026, said BCA.
About half of the demand will come from building projects and civil engineering
works, it added.
Besides public housing developments, there are also various
major developments in the pipeline.
Developments include MRT projects such as Phases 2 and 3 of
the Cross Island Line, its Punggol Extension, and the Downtown Lines Extension
to Sungei Kadut. There is also the Toa Payoh Integrated Development,
redevelopment of Alexandra Hospital, and a new integrated hospital in Bedok.
"The private sector construction demand is projected to remain steady over the medium-term, reaching about S$11 billion to S$14 billion per year from 2023 to 2026, in view of a healthy investment appetite amid Singapore’s strong economic fundamentals," said BCA.
The total nominal construction output, or value of certified
progress payments, is projected to increase from S$29 billion to S$32 billion
for 2022, it added. This is from the preliminary estimate of about S$26 billion
for 2021.
This is due to a steady level of construction demand and the
backlog of remaining workloads that were affected by the pandemic since 2020,
said the authority.
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